Overestimating and Underplanning

Common Business Planning Mistakes That You Should Avoid

Here are some common business planning mistakes that you should avoid. It is very important for any business plan to be practical and achievable, and it should also be error-free.

Worrying Too Much

If you constantly change your business plans because you are worried that things might not work out according to plan, then you need to inject yourself with some confidence.

No business is guaranteed success; but if you have done the necessary groundwork, then the chances of being successful will increase to a great extent.

Do not let worry or fear cloud your judgment. Be prepared to ride out rough times, especially in the beginning to avoid common business planning errors.

Lack of Specific Goals

Another common business planning mistake is not specifying your goals in your business plan. If you don’t do this, then you will not be able to chart out a proper roadmap to success. You will find it difficult to stick to a path that is confusing and ill-defined.

You will need to match a concrete goal with precise, time-bound dates. You should also chart out a proper roadmap that not only identifies potential pitfalls but also specifies the methods to avoid them.

Lack of Financial Planning

You should not build castles in the air, but instead should have plans that are supported by firm financial figures.

You should have achievable projections regarding on how you plan to finance your business and to maintain a positive cash flow. Good financial planning is the lifeline that will supply financial blood to your fledging business.

If you do not have the required knowledge to handle the financial aspect of your business plan, then get a certified accountant or tax consultant to do it for you.

If you avoid making this part of the plan, it will be very difficult for your business to succeed – and it is tantamount to committing financial suicide.

Overestimating and Underplanning

Another business planning error to avoid is putting in figures that seem physically impossible to achieve. By doing this your business will be headed towards disaster from the very first day.

On the other hand, even if your estimates are right on target, but you do not have plans to efficiently execute them, then they will reflect success only on paper.

The right mix of good estimates with adequate execution planning is necessary for any business plan to actually succeed in reality.

Picking up a Ready-Made Plan

You cannot just pick up any business plan and pray that it works for your business. Your business plans need to be modeled according to your business specifications.

Even simple factors such as location or population can produce different results in similar plans. Therefore, you will have to consider all the factors that are unique to your business when you sit down to do your business planning.

There are various business planning books and software packages available that can help you construct your business plan quickly and easily.

Your business plan needs to be designed according to your business, your ability and your particular market.

By avoiding the above business planning mistakes, you can devise a business plan that will help your small business to be ready to face any eventuality – and it will help you to reach your goals. -Your M.B.A. EJ Owens

Fight the Fear of Networking

Listen to our M.B.A. EJ Owens explain steps to fight the fear of networking. Listen to his steps of fear fighting to advance your business through networking.

fear-of-networking

-Your M.B.A. EJ Owens

I Have a Great Business Idea, uh… Now What?

I Have a Great Business Idea, uh… Now What?

The advice you normally get before starting a new business venture, if you get any at all, is research, plan, start and manage (in that order). You’ve got a great business idea – now what should you do?

I’ve laid out a few strategies to help you.

 

Homework Is First!

Your business idea may be great, but you should have a solid plan to get it off the ground. To develop a well-structured plan, you’ll have to do a good amount of homework, or research.

 

Don’t skim over the details; get answers to areas you do not understand. Get relevant books or attend programs to understand the issues involved in running your type of business. Arm yourself with pen and paper, meet or call potential clients and go get their views.

 

Get a manager’s book, any notebook solely dedicated to your business idea, and write every thought you’ve ever had about this business idea in it. Keep it by your bed at night and when you get a thought quickly write it down. If it doesn’t make sense at the time don’t worry. I have had many thoughts that later were combined with other thoughts and together they formed a great venture. Trust your instinct but confirm it with research.

 

You now have important information, and a network of potential clients. Based on this sound research, formulate your business plan.

 

Chalk Out a Business Plan

Chart out a detailed, well-structured business plan, with four broad categories; namely:

1.      Prepare your business description

2.      Decide on your marketing strategies

3.      Evaluate availability of funds

4.      Choose management practices

 

The business plan will enable you to make accurate profit/loss forecasts and optimal cash flow projections to equip you with ideas and plans for improvement before you embark on your venture.

You can check out many business plans and business plan guides available on the Internet for reference.

 

After you write down your business plan, it is time to get a good support system in place.

 

Build a Support System

When your business plan is ready, it’s time to get yourself a support system.

Discuss the pros and cons of your business ideas with a friend, a colleague, an experienced family member or a professional. Use their expertise to get feedback on your business plan. Their input will help your business grow.

Find a mentor, and use their suggestions to guide you through the rough patches. Hire, train and retain your employees and follow fair business practices to enhance their motivation levels.

 

Sort Out Legal and Tax Matters

Sort out the legal issues at the very beginning. Understand the process of registering your business and follow it to a T. Learn about workers compensation, insurance policies and payroll taxes. Plan effective tax management policies to avoid paying hefty IRS penalties at year-end. Ensure that all your contracts are legal and in writing. Different types of contracts include service contracts, rental agreements and leases, purchase orders, offer letters etc.

 

Get into the habit of providing a receipt to all your customers, and getting one for all services and products that you purchase.

 

Plan Contingent Strategies

A startup business brings with it a fair amount of mental and financial pressures. Therefore, in conjunction with your business plans develop strategies to combat these pressures.

Make sure you have sufficient financial backup to support your family in crunch situations (90 days of funds). Since every business has a gestation period, you should have enough financial reserve to last you through your business’ teething stage, as this will alleviate mental stress and let you to focus on your business.

 

By following the above steps, you can take your business idea and transform it into a solid, profit-making enterprise. – Your M.B.A. EJ Owens